Effective Negotiation in an Oracle ULA – The 6 Key Contract Terms

A typical Unlimited Licence Agreement or more popularly “ULA” between Oracle and the enterprise customer will cover all important contract issues like the customer name, usage rights, range of products covered, caps on support costs and price hold for additional licences, amongst several others. A ULA contract, unless drafted carefully and diligently, can make a serious dent into a company’s finances, especially after the end of the ULA period.

To avoid a serious aftermath and also to manage an Oracle ULA well throughout its life-cycle and later, it is important to consider a few critical areas right from the beginning when the favourable T&C’s of the ULA agreement can be negotiated with Oracle. These are as follows:

Negotiate on the Customer Definition

It is important to ensure that the complete organization name is fully listed, including any subsidiaries or parent organization that will be using the software licences that form part of the Oracle ULA agreement. The Oracle ULA agreement must also explicitly state the geographical locations outside the country where the ULA contract is agreed and signed.

Closely compare the Master Agreement

It is important to carefully assess the master agreement, whether it is the OLSA (Oracle Licence Services Agreement), SLSA (Oracle Licence Services Agreement) or the more recent OMA (Oracle Master Agreement), in order to ensure whether the T&C’s in it may conflict with those in the ULA agreement. Because of the fact that Ordering Document takes precedence over the master agreement, therefore this could be the ideal time to propose adding any favourable clauses that should have been originally included into the master agreement.

Understand the Licence Metric Definitions

Licence metric definitions explicitly state how the usage for the Oracle products in scope must be measured and also define usage rights for each product listed on the Oracle ULA agreement. An accurate understanding of the licence metric definitions can be a difficult subject to defend or agree upon during an Oracle licence audit. Most standard licence metric definitions are included in the Oracle price lists and technical support policies that are publicly available, and must be consulted during negotiation.

Negotiate for multiple years of caps on Support Costs

Historically speaking, Oracle is known to have provided multiple years of price caps on increase in technical support costs, including a couple of years with no increase in support costs. It is important to gain clarity about what the first renewal year costs will be towards maintenance, thereby negotiating with the software vendor to include that figure in the Oracle ULA ordering document

Consider additional products under a Price Hold

Even if an specific Oracle product is not part of the Oracle ULA agreement in question, but is expected to be used in the next 12 months or so, negotiate for the right to include this product(s) in the Oracle ULA agreement. Consider including a pre-negotiated price hold for these products until a specific period of time if there is a possible roadmap for any projects using these products.

Negotiate worldwide usage rights

You must negotiate broad usage rights so that the licences can be used where needed. It is an observation that many Oracle ULA agreements have overlooked negotiating usage rights beyond the country where the ULA agreement was signed and the licences were purchased. Try to incorporate worldwide usage rights — which is generally for no additional cost. It is not uncommon to note that the location restriction has previously confined organisations from moving licences internally within the same company for locations outside the original purchase site.